Ethics, Worldview & Influence

Incentives Drive Behavior

In the late 1990s, a group of economists ran an experiment in a set of daycare centres in Israel. They added a small fine for parents who picked their children up late. Something very strange happened: the number of late pickups went up, not down. The economist who told this story in the book Freakonomics was Steven Levitt, and his explanation changed how a lot of people think about why people act the way they do. In this lesson you will learn to see incentives and constraints behind behaviour, analyse a real-world case, and redesign one small incentive system to produce a better outcome.